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monthly rent 3000 May-13 Jul-14

purchase price 600000


requrement change 5-10 years even sooner if her job workout well
condo + mtce 1355 50
downpayment 120000
tax 18000
closing fees 2000
pv 480000 if sale back
rate (NIR) 0.04 0.05 of sp
nper 300 2000 closing fees

EAR 0.003305 0.00330589 ?


1) (₹2,524.61)
(₹3,929.61)
2) 396.6 462.7 ignore tax component
3) ₹4,326.21 ₹4,392.31
Difference ₹1,326.21 ₹1,392.31

Senario Analysis
Initially 2 years 3 years
Purchase Price 600000
Legal fees 2000
Deed transfer (@3%) 18000
Down Payment (20%) 120000
Total Due at Closing 140000
Amortization Period (years) 25 23
Payment Freqiency 12 12
Number of Payment remaining 300 276

Scenario 1 Price remain unchanged


SP 600000
Realter Fees (@5) 30000
Other Selling fees 2000
Princ OD 456609.29
Net Proceeds 111390.71

______nds at Closing 140000


Opp Cost of Extra Payments 34727.42

Net FV -63336.72 76663.29

PV of Future Net (NPV) ₹58,514.59


Scenorio 2 down @ 10% original

Scenario 3 increase by 2% annually

Scenario 4 increase by 5%
1) required monthly mortgage
2) opportunity cost (on monthly basis)
3) aditional monthly payments (including opportunit cost)
4) resale in 2, 5, 10 years principal outstanding, future gain or loss

scenarios
a unchange
b drop 10% over 2 yrs, back to original price in 5, then 10% by the end of 10 yrs
c increases by annual rate of inflation of 2% for 10 yrs
d increases by 5% annually for 10 yrs

? Why include Opportunity Cost Qualitative factors


Ans Separate legal entity Pro social status, secure & independe
Cons liquidity pressure

Distance

5 years
original cost
gain or loss

by the end of 10 yrs

cial status, secure & independent settlement, greater emotional attachement of ownership
uidity pressure